Angry investors sued Credit Suisse after the Swiss bank saw a significant loss in its stock market value. They say the finance group gave its own business a more upbeat outlook in its annual report for 2021. In it, Credit Suisse did not report deficiencies in internal controls that later came to light.
Shares of Credit Suisse lost nearly 16 percent on Feb. 9 after fourth-quarter results were announced. The bank suffered a loss of more than 2 billion as the company had to incur many expenses after several scandals. Credit Suisse fell further in early March following news that its 2022 annual report was delayed due to “significant weaknesses in internal control over financial reporting”.
The law firm representing investors in the case was also involved in the first case against Silicon Valley Bank, which filed for bankruptcy last week and was taken over by US government agencies. In addition to Credit Suisse, chairman Axel Lehmann is a defendant. Investors blame him for saying in the media that the outflow of assets has “more or less stopped”, while the bank has seen a lot of cash and customer outflows.
Concerns about customers withdrawing their money from Credit Suisse caused an unprecedented blow to the bank on stock markets this week. Share prices recovered somewhat after Switzerland’s central bank pledged to support the country’s second-largest bank.
Tensions around the banking sector have risen sharply in the past week following the bankruptcy of two mid-sized banks in the US, Silicon Valley Bank and Signature Bank.
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